Trade-Ideas LLC identified

KLA-Tencor

(

KLAC

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified KLA-Tencor as such a stock due to the following factors:

  • KLAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.2 million.
  • KLAC has traded 661,305 shares today.
  • KLAC traded in a range 213.6% of the normal price range with a price range of $1.77.
  • KLAC traded below its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on KLAC:

KLA-Tencor Corporation designs, manufactures, and markets process control and yield management solutions worldwide. The stock currently has a dividend yield of 2.7%. KLAC has a PE ratio of 21. Currently there is 1 analyst that rates KLA-Tencor a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for KLA-Tencor has been 974,200 shares per day over the past 30 days. KLA-Tencor has a market cap of $12.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.76 and a short float of 1.6% with 2.97 days to cover. Shares are up 11.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates KLA-Tencor as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, notable return on equity, expanding profit margins and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 38.27% and other important driving factors, this stock has surged by 46.15% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, KLAC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 33.5% when compared to the same quarter one year prior, rising from $131.64 million to $175.78 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, KLA-TENCOR CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for KLA-TENCOR CORP is rather high; currently it is at 63.72%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.67% significantly outperformed against the industry average.
  • KLA-TENCOR CORP has improved earnings per share by 38.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KLA-TENCOR CORP reported lower earnings of $2.25 versus $3.47 in the prior year. This year, the market expects an improvement in earnings ($4.30 versus $2.25).

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